title
Presentation, discussion, and possible action to authorize the issuance of the 2025 Emergency Solutions Grants Program Notice of Funding Availability and publication in the Texas Register
end
RECOMMENDED ACTION
recommendation
WHEREAS, the U.S. Department of Housing and Urban Development (HUD) will allocate Emergency Solutions Grants (ESG) Program funds to the Texas Department of Housing and Community Affairs (TDHCA or the Department);
WHEREAS, per 24 CFR §576.203(b), states have 24 months in which to expend ESG funds on eligible activities and, which, if not met, could result in the return of funds to the HUD;
WHEREAS, per 10 TAC §7.34, the Department may withhold a portion of funds from the competition to be used for the issuance of Continuing Awards;
WHEREAS, the Department wishes to release a Notice of Funding Availability (NOFA) for the ESG Program in accordance with 10 TAC §7.33 concerning Apportionment of ESG Funds, and will retain 4.5% for administrative purposes;
WHEREAS, the Department will publish on its website finalized balances available within each CoC Region prior to the beginning of the Application acceptance period; and
WHEREAS, the Department will evaluate organizations eligible for receipt of a Continuing Award in accordance with 10 TAC §7.34, will make offers of Continuing Awards to eligible entities, and will accept Applications from eligible Applicants under a Competitive Application cycle;
NOW, therefore, it is hereby
RESOLVED, that the Executive Director and his designees be and each of them hereby are authorized, empowered, and directed, for and on behalf of the Department, to post on the Department’s website and to publish a notification in the Texas Register a 2025 ESG NOFA, and to make any technical corrections or perform such other acts as may be necessary to effectuate the foregoing.
end
BACKGROUND
The ESG Program is funded by HUD to assist people to regain stability in permanent housing quickly after experiencing a housing crisis and/or homelessness. ESG funds can be used for the administration of the ESG grant, including utilization of a Homeless Management Information System (HMIS); the payment of certain expenses related to operating emergency shelters; essential services related to emergency shelters and street outreach for persons experiencing homelessness; and homelessness prevention and rapid re-housing assistance.
The Department has not yet received notice of an allocation from HUD for its regular allocation of 2025 ESG funds; the Department anticipates receiving notice of the allocation amount prior to June 6, 2025. As part of the ESG funding structure, funds are allocated regionally based on a formula that equally weighs renter cost burden, poverty rates, and homelessness counts, while applying a negative weight to prior ESG funding received. These calculations are applied within each Continuum of Care (COC) region.
Historically, there have been 11 COCs in Texas. As of this year, there are now 12 COCs with the addition of the newly recognized City of Lubbock COC , which includes both the City and County of Lubbock. Previously, this geographic area was part of the Texas Balance of State COC. This separation and formal designation of Lubbock as a distinct CoC is a significant development for the regional allocation of ESG funding.
Staff recommends publication of the ESG NOFA with estimated percentages of the total funds available within each Continuum of Care (COC) region, and will later publish the actual amount of funds based on these percentages when the allocation amount is obtained from HUD. The Department will retain 4.5% of the allocation amount for administrative purposes. The remaining funds will be made available for awards to Subrecipients though the 2025 ESG NOFA.
Some of the awards made through the NOFA may be as a result of an offer for a Continuing Award for eligible Subrecipients, as outlined in 10 TAC §7.34, Continuing Awards; for funds not offered or accepted through a Continuing Award, Applicants may apply through the Competitive Application cycle. All funds will be allocated regionally based on the Allocation Formula. The Department will initially set aside 75% of the total allocation for Continuing Award Applications and 25% of the total allocation will be made available for Competitive Applications; any funds remaining after Continuing Award offers have been accepted will be added to the total available funds for Competitive Applications. Final allocated amounts will be posted to the TDHCA website on or before June 6, 2025; inclusive of amounts remaining for Competitive Applications after offers of Continuing Awards have been determined. The amount made available for Competitive Applications may increase, but will not decrease, after this date.
Federal program rules require the Department to commit all funds within 60 days of HUD’s execution of the grant agreement; the Department anticipates this will occur during the late summer of 2025. The contract period may begin no earlier than the date receipt of funds from the annual ESG allocation and will be effective for one year for each award. It is because of this short 60-day deadline that staff is seeking authorization to release the NOFA with estimated percentages.
Applicants may request between $75,000 and $400,000 in ESG funds total for awards made under a Continuing Award and a Competitive Application. This limitation includes all award amounts for Program Participant services, HMIS, and Administration, as outlined in the NOFA.
The availability and use of these funds are subject to the Department’s rules governing under Title 10, Part 1, Chapter 1, Administration; Chapter 2, Enforcement; and Chapter 7, Homeless Programs, Subchapter A, General Policies and Procedures, and Subchapter C, Emergency Solutions Grants (ESG) of the Texas Administrative Code. For Units of Local Government, the Texas Grant Management Standards (TxGMS) also govern the availability and use of these funds. Federal laws and regulations that apply to these funds include the Homeless Emergency Assistance and Rapid Transition to Housing Act (42 U.S.C. §11302 et. seq.), as amended; the HUD regulations codified in 24 Code of Federal Regulations (CFR) Part 576; 24 CFR Part 58, for environmental requirements; 2 CFR Part 200 for Uniform Administrative Requirements; 24 CFR Part 75 for Section 3 requirements; and 24 CFR Part 5, Subpart A for fair housing.
Details on the award selection process, handling of administrative deficiencies, funding limitations, eligible and ineligible applicants and activities, threshold requirements, award selection criteria, and application submission requirements are codified in 10 TAC Chapter 7, Subchapter C. Notification of the NOFA will be published in the Texas Register.
Applications will be accepted beginning the latter of the day after TDHCA’s notification of its ESG allocation amount or Friday, May 23, 2025, at 8:00 a.m. Central Time, until Monday, June 23, 2025, at 5:00 p.m. Central Time.